Correlation Between BerolinaCapital Premium and SISF BRIC

Can any of the company-specific risk be diversified away by investing in both BerolinaCapital Premium and SISF BRIC at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining BerolinaCapital Premium and SISF BRIC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BerolinaCapital Premium and SISF BRIC AC, you can compare the effects of market volatilities on BerolinaCapital Premium and SISF BRIC and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in BerolinaCapital Premium with a short position of SISF BRIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of BerolinaCapital Premium and SISF BRIC.

Diversification Opportunities for BerolinaCapital Premium and SISF BRIC

0.44

Correlation Coefficient

BerolinaCapital Premium  SISF BRIC

Very weak diversification

The 3 months correlation between BerolinaCapital and SISF is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding BerolinaCapital Premium and SISF BRIC AC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SISF BRIC AC and BerolinaCapital Premium is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on BerolinaCapital Premium are associated (or correlated) with SISF BRIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SISF BRIC AC has no effect on the direction of BerolinaCapital Premium i.e., BerolinaCapital Premium and SISF BRIC go up and down completely randomly.

Pair Corralation between BerolinaCapital Premium and SISF BRIC

Assuming the 90 days trading horizon BerolinaCapital Premium is expected to generate 0.6 times more return on investment than SISF BRIC. However, BerolinaCapital Premium is 1.67 times less risky than SISF BRIC. It trades about 0.2 of its potential returns per unit of risk. SISF BRIC AC is currently generating about 0.0 per unit of risk. If you would invest  9,028  in BerolinaCapital Premium on September 22, 2024 and sell it today you would earn a total of  287.00  from holding BerolinaCapital Premium or generate 3.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

BerolinaCapital Premium  vs.  SISF BRIC AC

BerolinaCapital Premium

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BerolinaCapital Premium are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable fundamental indicators, BerolinaCapital Premium is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

SISF BRIC AC

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SISF BRIC AC are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, SISF BRIC is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with BerolinaCapital Premium and SISF BRIC

The main advantage of trading using opposite BerolinaCapital Premium and SISF BRIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BerolinaCapital Premium position performs unexpectedly, SISF BRIC can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SISF BRIC will offset losses from the drop in SISF BRIC's long position.

The idea behind BerolinaCapital Premium and SISF BRIC AC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.